Can I Use My Employee LMS as My Extended Enterprise LMS?

“Can I use my employee LMS for extended enterprise learning?” I often hear this question, as someone devoted to extended enterprise learning technology.

Organizations invest a tremendous amount of time, money and effort in learning management systems for their employees. It’s natural to want to leverage this technology in serving broader business audiences. That’s the logic behind the question — and in all honesty, the best answer is “it depends.” Here are some key items to consider:

4 Issues That Determine Whether You Should Extend Your Employee LMS to Channel and Customer Training

The important point here is that you can’t take it for granted that your employee-oriented LMS provider has the functionality or experience you need. It’s important to verify capabilities. That starts with a needs analysis and business case development. Ideally, you should document usage scenarios, required functionality and preferred business licensing models. Then compare vendor “apples” with other “apples.”

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At Talented Learning we focus on providing the information and education to help you define those requirements and create a usable comparison of cost and solutions proposals. A good place to start is our LMS Vendor Reviews where we document vendors’ high level extended enterprise capabilities. Our Case Study section is a compilation of industry case studies found in our research. Talented Learning also provides personalized consulting services to help you streamline business case development, vendor selection and contract negotiation.

No matter how you choose to verify the functional capability, it doesn’t make any sense to proceed further with your internal LMS if they can’t do what you need or want. If they can, keep reading.

2) Business and Licensing Model

A common value proposition you will hear from your employee LMS provider is that there are economies of scale from a license, maintenance, implementation and hence cost standpoint to expand the existing LMS to external audiences. You have to take that claim with a grain of salt, however. Vendors are out to sell their software and they negotiate for a living.

Internal employee LMS solutions are priced in a tiered per-user model meaning that the cost-per-user decreases with more and more users. There is usually no cost delineation between frequent or infrequent users. If you are an employee, you need a license — pretty cut-and-dry. With the tiered license approach, adding on the additional extended enterprise users at an ever decreasing price sounds cost effective and maybe so. However, most experienced LMS vendors abhor specifying future optional pricing in their contracts, so unless you negotiated the tiered cost in your contract, you are somewhat at the mercy of the vendor and their then “current” pricing and tiers.

To make matters more complicated, the number of external users is almost always significantly more than the number of employee users and many of those external users may be one-time or infrequent users. Many times this difference makes the “scale” of the internal and external audiences incompatible and puts the license and negotiating advantage most definitely in the vendor’s favor.

From a vendor’s perspective, there is already a line in the sand on what a user license is worth. You have already purchased and deployed their LMS for your employees and they want to hold onto the original scale. A common sales strategy is to sell the extended enterprise solution by showing how much money the company would make or save in comparison to what the solution will cost to expand and try to divert your focus from the difference in scale and the fact of one-time and infrequent users. Extended enterprise functionality may also require licensing additional LMS modules to support the multiple portals, language localization, social or ecommerce that would have cost implications that also make comparing the scale of the solutions tough.

By all of these above methods, existing vendors try to drive the maximum pricing point they can obtain and hold. They will leverage their advantage right up to the point you threaten to open up the bid with other vendors and then you will get the salesperson’s attention.

There has been a push the last few years from the smaller pure SaaS LMS providers towards unlimited use licenses, pay as you go, or royalty licensing that better aligns with extended enterprise usage. These shared risk and shared reward licensing approaches designed for external audiences with sporadic usage patterns have lots of fiscal advantages over trying to expand your existing incompatible license model. You get to invest more in your content upfront vs. your infrastructure. You also only pay for what you use as you continually try to grow your solution. The easy-to-deploy nature of SaaS solutions neutralizes the cost of deploying focused channel or customer training.

Keep your vendor honest and invite others to bid on your project. If you have a higher volume of potential users, different usage patterns, additional functionality, the cost to support the extended enterprise could be a significant ongoing investment. The cost to deploy a new standalone externally facing LMS may be drastically less with a vendor purely focused on extended enterprise vs. expanding your existing LMS. If you can enjoy the same cost savings or increased revenue, why pay more for your LMS solution? A vendor competition will always be in your best interest whether you decide to expand or purchase a standalone system for external audiences.

3) Political Considerations

A lot of internal LMS solutions are now part of larger integrated talent and performance management systems.

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Naturally, these solutions are owned politically and financially by the Chief HR Officer in a corporation. Since many external learning efforts are led by marketing, sales or operational groups that don’t fall under HR, the possibility for conflict of interest arises.

Why? Once again, because the requirements are different, the external users need different functionality, access, workflow, content, reports and administration. If the external learning groups have to always work through internal HR to get what they want, it can be laborious and irritating for both parties. Good LMS systems should be able to provide the ability to support both groups, but many organizations find it hard to do both at the same time with different owners or they simply can’t or won’t. If the extended enterprise learning is an extension of the HR, it really simplifies the political issues.

My recommendation is to determine the dynamics of ownership and determine whether usage of the system would be collaborative or dictatorial before deciding.

4) Content

The need to share content from your internal LMS with external users is a very good business reason why you might leverage your internal LMS to support extended enterprise audiences. For example, if an organization can use the same proprietary sales elearning to train internal and channel sales executives, that makes more sense than developing content for these audiences separately and independently.

The content usually needs to be tailored to the outside audiences though. This could be as simple as branding the content for your large partners or as complex as integrating partner specific content into elearning.

If an organization is using an online Learning Content Management System (LCMS) to develop and maintain elearning content, the sharing process is technically feasible and practical including the tailoring of elearning content for different external audiences. Conversely, if an organization is using stand-alone authoring tools like Articulate or Lectora, the sharing of content will be possible but tailoring will be painful and negate much of the content sharing cost advantage.

As part of the overall business case development for an extended enterprise LMS solution, the content strategy needs to be fully fleshed out. Organizations need to define what content they need, what content they have, how they are going to develop new content, update content, share content, tailor content and charge for content. If there are opportunities to leverage and share content from the internal employee catalog, you should, but it doesn’t have to be the same LMS. Due to the SCORM, AICC and xAPI standards, content is easily portable from one system to another and with integration, disparate LMS solution can share and access the same content repository or LCMS solution.

Conclusion

At first blush, it would seem that the answer to “Should I use my employee LMS as my extended enterprise LMS?” would be yes — but don’t be so hasty. Take the time to reach a conclusion that is right for your organization. Create your business case, determine the status of the four areas above, and bring in some competition to drive the best response from the vendors as you evaluate solutions. Then make your decision.

Arguably, the extended enterprise LMS is going to have more visibility and more impact on your bottom line than a hard-to-measure internal LMS. Treat it accordingly.

Thanks for reading!

Want more insights? Watch our on-demand webinar:

When business decision makers think of training, they typically think of employees first. That’s one reason why so many learning platforms focus on workforce development and compliance.
But business success also depends upon the ability to educate customers, channel partners and others in your value chain.

How can you leverage learning technology to move beyond an “employees only” mentality? Take an in-depth look at this topic with John Leh, Lead Analyst and CEO at Talented Learning and Gary Underhill, Sr. Solution Architect at Expertus. You’ll learn:

How to understand non-employee “external” audience learning needs

How to avoid the “gotchas” of multiple audiences

LMS functionality required to serve multiple audiences

Strategies for building on an existing employee-focused LMS infrastructure

John Leh is CEO and Lead Analyst at Talented Learning, LLC. Named one of the Top 20 Global Elearning Movers and Shakers of 2017, John is a fiercely independent LMS selection consultant and blogger who helps organizations develop and implement technology strategies – primarily for the extended enterprise. John's advice is based on 20 years of industry experience, having served as a trusted LMS selection and sales adviser to more than 100 learning organizations with a total technology spend of more than $65 million. He helps organizations define their business case, identify requirements, short-list vendors, write and manage RFPs and negotiate a great deal. You can connect with John on Twitter at @JohnLeh or on LinkedIn.